Tablets
: Minnows Deliver Bitter Pill to Biggies
Clutch
of upstarts taunts erstwhile challengers with cheaper tablet PCs
Even a year
ago, companies such as Micromax and Lava were thought of as upstarts
challenging mighty global corporations such as Nokia. With cut-price mobile
phone models packed with features, they redefined the rules of the game and
snatched market share from established players. But now, they are established
players and little-known companies in the tablet space are doing unto them what
they did unto Nokia and others. Aiding the new upstarts of mobility — among
them Kolkata-based Chirag, Bangalore’s Lacs, WishTel from Mumbai and
Noida-headquartered Zync Global — are India’s smaller towns and cities. Places
such as Ludhiana, Wardha, Hubli and Vijayawada are lapping up their tablets
that cost around . 6,000 apiece while the bigger brands concentrate on larger
towns with products priced at around twice that amount. According to technology
market researcher CyberMedia, India’s tablet market has become
hyper-competitive with the entry of new vendors. About 90 of them are estimated
to have launched tablets till the end of the second quarter of the current fiscal
year. The likes of Chirag, Lacs and Wish-Tel have opened hundreds of exclusive
stores in India’s tier III and IV towns to improve market share and catch up
with homegrown incumbents such as Micromax and HCL. Some of them are also
relying on celebrity endorsements, much like Micromax and Karbon did to break
the stranglehold of MNCs. Zync started selling tablets in November 2011, but
has already spent over . 20 crore on advertising, according to its director
Ashish Garg.
Indian Consumers’ Tablet Buy Jumps
673%
The firm, with revenues of about . 150 crore, launched an Android-based tablet priced at . 5,500 earlier this month.
Garg told ET that his company is setting up service centres in over a hundred small towns, besides getting ready to export tablets to Latin America and Africa by the year-end. For now, Zync sells about 30,000 tablets a month.
In the three months to June, Indian consumers bought about 5.5 lakh tablets, a 673% jump over the year-ago period, according to data from CyberMedia. The average selling price of tablets dropped to . 13,000 from about . 26,000 at the beginning of the year.
The . 700-crore Intex Technologies is in talks with pharmaceutical firm Ranbaxy for supplying some 10,000 tablets for its field sales staff.
“Our focus markets are places such as Ludhiana, Meerut, Jaipur, Hubli, Mysore and Vijayawada, where people are not afraid to buy small brands. Urban buyers still prefer big brands,” said Sanjay Kumar, head of the mobile business for Intex, which has a sales partnership with retail chain Croma. Intex, which recently introduced its i-Buddy tablets priced at . 6,500, expects to sell 50,000 units during the October-December festive season. Lacs Magnum plans to increase the number of its exclusive stores from 60 to 1,000 across the country over the next year while rival Chirag will set up 50 franchisee stores by November-end.
Lakhshya Verma, Chirag’s head of business development, said the firm has managed to sell “a decent 25,000 units” in the past 14 months.
Having played the price game once, the Indian incumbents are not sitting idle. They are willing to go where the demand is and sell at a price point that meets the demand.
Micromax, for instance, launched its Funbook priced at . 6,000, although its high-end tablets sell for up to . 10,000. “We were surprised to see that about 35% of our initial orders were from small towns,” said Micromax Chief Executive Deepak Mehrotra.
During the April-June quarter, Micromax was India’s top tablet vendor, beating Samsung and Apple. Micromax had an 18% market share during the quarter, compared to Samsung’s 13% and Apple’s 12%.
Incumbents see a parallel between the flurry of new entrants in the tablet space and developments in India’s mobile phone market. “We can draw an analogy with the evolution of the feature-phone market in India,” said SN Rai, co-founder and director at Lava Mobile. “We suddenly saw a huge number of players coming in, but many were also exiting at the same pace.”
Analysts agree the new entrants will not have staying power if they compromise on quality to bring down prices.
“These companies procure white-label products from China. These are relatively cheaper because they follow the basic design and specifications,” said Faisal Kawoosa, lead telecom analyst for CyberMedia Research. That is not very different from how Micromax, Lava and Karbon started out. But once they gained scale and managed high volumes, they invested in quality.
The firm, with revenues of about . 150 crore, launched an Android-based tablet priced at . 5,500 earlier this month.
Garg told ET that his company is setting up service centres in over a hundred small towns, besides getting ready to export tablets to Latin America and Africa by the year-end. For now, Zync sells about 30,000 tablets a month.
In the three months to June, Indian consumers bought about 5.5 lakh tablets, a 673% jump over the year-ago period, according to data from CyberMedia. The average selling price of tablets dropped to . 13,000 from about . 26,000 at the beginning of the year.
The . 700-crore Intex Technologies is in talks with pharmaceutical firm Ranbaxy for supplying some 10,000 tablets for its field sales staff.
“Our focus markets are places such as Ludhiana, Meerut, Jaipur, Hubli, Mysore and Vijayawada, where people are not afraid to buy small brands. Urban buyers still prefer big brands,” said Sanjay Kumar, head of the mobile business for Intex, which has a sales partnership with retail chain Croma. Intex, which recently introduced its i-Buddy tablets priced at . 6,500, expects to sell 50,000 units during the October-December festive season. Lacs Magnum plans to increase the number of its exclusive stores from 60 to 1,000 across the country over the next year while rival Chirag will set up 50 franchisee stores by November-end.
Lakhshya Verma, Chirag’s head of business development, said the firm has managed to sell “a decent 25,000 units” in the past 14 months.
Having played the price game once, the Indian incumbents are not sitting idle. They are willing to go where the demand is and sell at a price point that meets the demand.
Micromax, for instance, launched its Funbook priced at . 6,000, although its high-end tablets sell for up to . 10,000. “We were surprised to see that about 35% of our initial orders were from small towns,” said Micromax Chief Executive Deepak Mehrotra.
During the April-June quarter, Micromax was India’s top tablet vendor, beating Samsung and Apple. Micromax had an 18% market share during the quarter, compared to Samsung’s 13% and Apple’s 12%.
Incumbents see a parallel between the flurry of new entrants in the tablet space and developments in India’s mobile phone market. “We can draw an analogy with the evolution of the feature-phone market in India,” said SN Rai, co-founder and director at Lava Mobile. “We suddenly saw a huge number of players coming in, but many were also exiting at the same pace.”
Analysts agree the new entrants will not have staying power if they compromise on quality to bring down prices.
“These companies procure white-label products from China. These are relatively cheaper because they follow the basic design and specifications,” said Faisal Kawoosa, lead telecom analyst for CyberMedia Research. That is not very different from how Micromax, Lava and Karbon started out. But once they gained scale and managed high volumes, they invested in quality.
INDU
NANDAKUMAR & AKANKSHA PRASAD ET121017
No comments:
Post a Comment